Hundreds of thousands of immigrants who are legally entitled to work in America could be debarred from jobs as a result of errors in a federal database designed to weed out unauthorised individuals from the workforce, according to new government research.

Reports published by the US Citizenship and Immigration Services (USCIS) reveal that the so-called E-Verify programme, which allows employers to check whether new workers are properly documented, is so inaccurate that if replicated across the country it could wrongfully exclude more than 200,000 people from the workforce. As many as one in 12 people who were turned down for jobs under the E-Verify system in fact were fully entitled to work.

"It's clear that under the E-Verify model, people who should be able to work will not be able to work," said Chris Calabrese, legislative counsel for the American Civil Liberties Union.

E-Verify has become a central issue in the swirling debate in Congress about comprehensive immigration reform that would seek to provide a pathway for citizenship for the 11 million undocumented immigrants currently in the country. To assuage Republican complaints that such a pathway would offer an "amnesty" for unlawful behaviour, a bipartisan group of US senators that forged a deal promised that E-Verify would be extended to all new employees within five years of the passage of immigration reform.

At that point all new employees would in effect have to be screened, to check that their immigration and work credentials were in order.

But a USCIS report evaluating the accuracy of the database showed a persistent level of errors. Of the 191,000 workers who received rejections under E-Verify on grounds that they were not properly documented, some 15,000 were called wrongly as they were in fact entitled to work.

The ACLU has calculated that were that ratio extended across the US, some 225,000 workers would be wrongly cast out of the job market.

Overall, 0.3% of all E-Verify checks were found to have wrongly characterised individuals as unauthorised for work. The USCIS stressed that percentage was declining over time, citing a 0.7% figure for 2005 as evidence that the system is improving. But the proportion of wrongful results rises sharply for that group of workers who do not yet have US citizenship but who are fully entitled to work. Within that group, the error rate leaps to 4.2%.

Calabrese said that the disparity in treatment between US citizens and authorised non-citizens heightened fears that the E-Verify programme could have a discriminatory effect. "We are really worried that what this could do is reinforce existing stereotypes among employers who makes assumptions about potential workers based on their ethnicity or race," he said.

A separate USCIS report reveals that 9% of employers are misusing the E-Verify system by applying it to prescreen job applicants. Under the rules of the programme, employers are meant to apply the test after an individual has been hired, not before the job has been offered.

But with more than one in 10 employers using E-Verify to weed out applicants before making a job offer, the potential for abuse is greatly increased. It is possible for applicants to be turned away from a post without ever finding out that they have been wrongly flagged as unauthorised on the database.

Frank Sharry, executive director of the immigration reform campaign America's Voice, said E-Verify "is at the heart of the debate over immigration reform and we have got to get this right. The error rate could keep Americans and authorised workers from taking jobs just because of bureaucratic snafus".

Sharry pointed out that the error rates exist at a substantial level even when only about 10% of all US employers are signed up to make use of E-Verify under voluntary pilot schemes. Should the system be made compulsory and expanded to cover 100% of employers, the technical challenges are likely to be enormous and could have a further impact on accuracy.